Why the Bank Does Not Want Your House

Many homeowners, when they cannot pay their mortgages, stop reading letters from their lender and ignore phone calls regarding their mortgage. In essence, these homeowners simply give up and decide that the bank is going to take their home, and there is nothing they can do about it.

The fact is, the bank doesnt want your house. What they want is for you to pay your mortgage, and if they can help you do that, many lenders will. True, many lenders right now are in bad shape themselves. The housing sector and housing finance are in a huge mess, many people are losing their homes, and many banks are unable or unwilling to work with homeowners to save their mortgages.

But most banks will at least try to help homeowners if they believe they can save the mortgage and continue to receive payments on the loan. You may think your bank is not interested in helping you. And banks are not in the business of just helping people for no gain. But they are also not in the business of owning and selling real estate.

Many people dont think about this, and assume the bank will repossess the home, because we hear about this happening and we just come to believe that banks repossess homes. Its true that people lose their homes to foreclosure. Its more true and more common right now than it has been in recent years.

This is a scary proposition for many homeowners. Talking to your lender may seem even scarier. But talking to your lender is the only way out of your situation. You may not be able to avoid foreclosure by talking to your lender. But if you hide from your lender, you are going to lose your home. Its better to try to work something out, and be turned down, than to give up your home without any effort to save it.

Foreclosures are extremely costly to banks. They do not make money when they take over your home and sell it in foreclosure. In fact, they usually lose quite a lot of money. Banks do not specialize in owning and selling distressed properties. They specialize in making loans and earning interest on those loans. If you lose your home, they make money.

What the bank really wants is for you to resume payments on your loan. If they believe that you can make a smaller mortgage payment, they will most likely work with you to lower your interest rate or extend your loan term. Their goal is for you to continue paying off your loan, because thats the only way they earn money.

Once you understand that your lender wants to continue your loan, you have a much better chance of talking successfully with your lender about how you can rehabilitate your mortgage loan and avoid foreclosure.

Of course, banks do foreclose, and they do own and resell distressed property. Not every loan is salvageable in the lenders eyes. But the lender has to make that decision. If you try to make it for them, you will lose your home. Talking to your lender may save your home.

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